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Diebold v Northern Trust Investments Class Action

United States District Court for the Northern District of Illinois
Case No. 09-cv-1934

Settlement

In August 2015, the Court granted final approval to a class action settlement with Northern Trust Investments concerning allegations that Northern Trust breached its fiduciary duties to participants in ERISA plans when it imprudently structured and managed its securities lending program.

The settlement class consisted of all plans that were governed by ERISA and participated in indirect securities lending through funds they were invested in during the Settlement Class Period of January 1, 2007 – October 31, 2010, and are alleged to have been damaged as a result of their funds’ participation in the securities lending program.

Case Overview

Plaintiffs in Diebold v. Northern Trust Investments, N.A. were participants in retirement plans who alleged that Northern Trust breached its fiduciary duties to investors when it imprudently structured and managed its securities lending program. Through the securities lending program, Northern Trust loaned securities that were owned by its clients to third party borrowers in exchange for cash collateral. This collateral was to be invested in conservative and liquid investments. Instead, Plaintiffs alleged that Northern Trust invested the collateral in long term debt, residential mortgage-backed securities, SIVs, and other risky and illiquid assets. Plaintiffs and their retirement plans suffered substantial losses as a result.

Case Documents

Amended Complaint – 12/03/09

Judgment – 08/10/15

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